Oral Answers to Questions

Greg Mulholland Excerpts

Tuesday 27th January 2015 Commons Chamber

[Mr Osborne]

The hon. Gentleman raises a serious point, and there is agreement on it across the political divide. The devolution of air passenger duty to Scotland raises the potential for real pressure to be put on airports in north-east England, but also on Manchester airport, which is partly in my constituency. We will of course have to see what the Scottish Parliament does when the powers are devolved, but the hon. Gentleman has my assurance that we will work together to ensure that we minimise the impact on the north-east if this happens, and that we will protect regional airports in England. We have a couple of years to work this out—it does not have be done tonight or tomorrow—and we can work out a plan that protects the brilliant Newcastle, Manchester and other regional airports.

[Greg Mulholland (Leeds North West) (LD)]

This Treasury team abolished Labour’s unjustifiable and unfair beer duty escalator and delivered two historic successive cuts in beer duty. We still pay more tax on our beer, however, so our British brewers are not getting a fair deal in comparison with their European counterparts. Will the Treasury make it a hat trick?

[The Chief Secretary to the Treasury (Danny Alexander)]

During his time in Parliament, my hon. Friend has been a champion of the beer industry, small pubs and small brewers across the country—and a very effective champion he has been, too. Of course I cannot make any commitments about the Budget at this stage, but I welcome his recognition of the progress made on this subject during the course of this Parliament, and I will certainly take his recommendations for the Budget very seriously.

Oral Answers to Questions

Greg Mulholland Excerpts

Tuesday 9th December 2014 Commons Chamber

[Danny Alexander]

I totally agree with the hon. Lady. It is incredibly important to improve the rate of house building. I would set the figure at closer to 300,000 houses a year across the UK, rather than the 200,000 that she mentioned. She will know that in the autumn statement we extended the affordable house building programme for a further two years in order to build 275,000 affordable homes in the next Parliament. We are taking forward the idea of Government commissioning of housing, which would be a radical departure for this country, at Northstowe, and looking at it as a solution for the whole country.

[Greg Mulholland (Leeds North West) (LD)]

I warmly welcome the infrastructure announcement, but does my right hon. Friend agree that we also need further devolution to allow the much-needed rail link to Leeds Bradford airport and the electrification of the Leeds-Harrogate-York line? Will he meet me and other interested colleagues who represent the area to discuss how we can take this forward?

Oral Answers to Questions

Greg Mulholland Excerpts

Tuesday 4th November 2014 Commons Chamber

[Mr Osborne]

We have cut taxes, including taxes for people in the north of England, for 25 million working people. Under the Labour Government, the gap between the north and south increased. We are working across party divides with local authority leaders to get in the investment and change this decade-long imbalance in our country.

[Greg Mulholland (Leeds North West) (LD)]

The last Labour Government cancelled the Supertram scheme in Leeds and then told the city that it could only have a bus-based solution. Does my right hon. Friend agree that as well as devo-max and “devo Manc”, we also need “devo Yorks”?

[Danny Alexander]

I could not agree more with my hon. Friend, and the Deputy Prime Minister has been championing that agenda in government for the last four and a half years. If the leaders of Leeds wish to come forward with proposals for further devolution and more power over the things he has been talking about, to ensure that we get the right economic developments in the Leeds area, we would be delighted to have those discussions in an active way, to try to settle a deal there as well.

Oral Answers to Questions

Greg Mulholland Excerpts

Tuesday 2nd September 2014 Commons Chamber

[Mr Osborne]

What the hon. Gentleman says is not a clear statement of the facts, because actually, full-time employment accounts for three quarters of all the new jobs created since 2010. Of course there are those who want part-time employment, but for those in part-time employment who want full-time employment, the answer is to continue to support the economy, to do the difficult things necessary on the public finances to inspire confidence in that economy, and not to have disastrous things like a jobs tax rise, which would make it more difficult for those people to get full-time work.

[Greg Mulholland (Leeds North West) (LD)]

Key to a long-term employment plan is the wonderful apprenticeship scheme. The new scheme was launched by the Business Secretary in Leeds. We have seen the creation of 2,000 apprenticeships since 2010. Will my right hon. Friend also welcome the fact that now, finally, Leeds city council is talking about a university technical college? Considering that there is a spare Leeds city council site, does he not think it is time that Leeds city council got on and built one?

[Mr Osborne]

I very much agree with my hon. Friend. The university technical colleges have been a real boost to technical education in our education system, and I know that there are ambitious proposals in Leeds. Indeed, I think, from memory, that one has just been given the go-ahead in Leeds. But I would also say that the apprenticeship scheme has been very successful. Working with myself and the Business Secretary, more than 2 million apprenticeships have been provided. We want to see more of those provided, so that young people have the skills to take the opportunities that the economy is now providing them.

Oral Answers to Questions

Greg Mulholland Excerpts

Tuesday 24th June 2014 Commons Chamber

[Mr Speaker]

Very briefly, Greg Mulholland.

[Greg Mulholland (Leeds North West) (LD)]

It is very welcome that the Government are introducing a statutory code of conduct for pub companies, but it lacks the all-important market rent only option. There is concern about the direct lobbying of the Treasury by the British Beer and Pub Association and the pub companies. When will the Treasury accept the freedom of information request from the all-party save the pub group?

[Mr Speaker]

Put the long version in the Library.

Oral Answers to Questions

Greg Mulholland Excerpts

Tuesday 11th March 2014 Commons Chamber

[Nicky Morgan]

I understand the point the hon. Gentleman is making, but the fact is that, given the changes introduced in last year’s Budget, the cost of a typical pint has come down. We should all be very grateful for that.

[Greg Mulholland (Leeds North West) (LD)]

I warmly welcome the Treasury decision to scrap the beer duty escalator, give a cut in beer duty and support a freeze this year, but although that has been hugely helpful to brewing, it has not helped many pubco pubs, which face a pubco price escalator. The price of an 11 gallon keg of Fosters for a pubco pub has gone up four and a half times more than it has for a free-of-tie pub, with the same inflation and the same duty. Will the Government stop this scandal with a fair deal for our local?

[Nicky Morgan]

The hon. Gentleman knows well that the Department for Business, Innovation and Skills has been reviewing that whole matter. It has had many thousands of responses to its consultation, and we await the response, which will be published in due course.

Oral Answers to Questions

Greg Mulholland Excerpts

Tuesday 28th January 2014 Commons Chamber

[Mr Gauke]

My hon. Friend makes a perfectly fair point. It is right that the Government take steps, through the public health responsibility deal, to encourage companies to reduce calories in their products, and that we encourage participation in sport. That is more effective and targeted than a tax increase.

[Greg Mulholland (Leeds North West) (LD)]

8. What steps he has taken to reduce the cost of living for those on low incomes.

[The Chief Secretary to the Treasury (Danny Alexander)]

In addition to lifting the income tax personal allowance, which I mentioned earlier, the Government are supporting working households’ income through other measures such as freezing fuel duty, supporting a council tax freeze and, most importantly, sticking to an economic plan that is getting hundreds of thousands more of our fellow citizens back into work.

[Greg Mulholland]

I thank my right hon. Friend for that answer. The best way to help people and families on lower incomes is to take them out of tax. What is the effect of the increase in the tax threshold compared with the last Government’s disgraceful decision to abolish the 10p tax rate?

[Danny Alexander]

That is a very good question. The tax threshold increases that we have presided over will have taken 2.7 million people out of tax. The personal allowance is a zero rate, whereas a 10p rate would halve the rate of income tax, so raising the personal allowance is literally twice as good.

Pub Companies

Greg Mulholland Excerpts

Tuesday 21st January 2014 Commons Chamber

[Toby Perkins]

My hon. Friend has successfully predicted what I am going to say. I will definitely touch on that issue, because it is one of the key elements of the debate.

I also want to take this opportunity to reflect on some of the other contributions that have been made in the run-up to the debate by Members trying to support pubs in their area. The hon. Member for Leeds North West (Greg Mulholland) has been a determined campaigner on this issue. Among his many valuable contributions to the campaign, his article in the Yorkshire Post on 10 May was on message enough for the Liberal Democrat press office to promote it with the message that

“pubco terms are the biggest reason for pub closures”.

That was his view in May 2013, as I know it remains. Now, eight months later, I am disappointed to see that he has signed the amendment proposing that the Government need more time to come to the conclusion he has so consistently and persuasively argued for.

[Greg Mulholland (Leeds North West) (LD)]

The hon. Gentleman might be disappointed, but I was disappointed that he has tabled this Opposition day motion. We have had a conversation about this. My belief is that support for this issue commands a majority in the House of Commons, and that we need to do this properly, rather than through an Opposition day debate. I look forward to getting the recommendation from the Department for Business, Innovation and Skills and, at that point, getting everyone on both sides of the House together to push this through.

--- Later in debate ---

[Damian Hinds (East Hampshire) (Con)]

The hon. Member for Chesterfield (Toby Perkins) outlined effectively and persuasively the importance of pubs as valuable assets to this country. They are at the heart of our communities and a big part of being British. In East Hampshire we have great community hubs, from the Fox and Pelican at Grayshott to the White Hart at Holybourne. There are also a number of the beautiful country pubs that form part of our national image and attract people to visit this country, such as the Queens and the Selborne Arms, the Greyfriar at Jane Austen’s Chawton, the Harrow, the Trooper and the Pub With No Name. That great range of brilliant pubs is a mixture of managed houses, tenancies, leases and independent free houses.

Like many other areas, we have also suffered too many pub closures. Just in the past couple of years, in one town in my constituency, Alton, and its surroundings, we have lost the Gentleman Jim, the Railway Hotel, the Barley Mow, the Wey Bridge, the two pubs in Ropley—the Chequers and the Anchor—and, just recently, the only pub in the growing community of Four Marks, the Windmill. Like the pub that my hon. Friend the Member for Norwich North (Chloe Smith) mentioned, the Windmill is going to become a Co-operative retail store. Of course, a lot of other publicans are struggling to break even and make a decent living.

I welcome the Government’s support for the licensed trade, such as the scrapping of the beer duty escalator, the 1p of tax taken off a pint, the extension of small business rate relief and the community right to bid. It is worth remembering that the pub trade’s problems predate the beer duty escalator and exist in both tied houses and free houses. Top of the list is the declining propensity of men to visit a pub after work multiple times a week to drink reasonably large quantities of draught beer, which is a high gross margin product. The second, related, problem is the wide price gap between the on-trade and off-trade in alcohol sales, which has coincided with the arrival of affordable, decent quality new world wine. There are a whole range of other factors, many of which we would welcome in themselves but have had adverse consequences for the pub trade. I refer to things such as the smoking ban, radically different attitudes to drink-driving and changes in people’s living rooms, such as having big-screen TVs at home, not just at the pub. There is also intense price competition in food and leisure in general.

When I used to work for an integrated brewer—I worked for Greene King for a couple of years—the cost pressures that licensees used to talk about included the massive price of Sky, which my hon. Friend the Member for South West Bedfordshire (Andrew Selous) mentioned, the national minimum wage and the cost of products through the tie.

We could argue that pub owners take too much money from publicans, but to mention only the tie is to chase the wrong target. People have two key objections to it: the impact on product range, and the way the product is priced. On the first point, we must remember that the tie is not the same for every pub. For some, particularly food-led pubs, it excludes wine and spirits, for example, which can be bought from outside. For others, even a tied house, there may be provision for a guest beer or for what is sometimes called a “local hero”, which means that a pub owner in an area where there is one dominant beer brand might be allowed to have that brand, even though it is a direct competitor.

A lot of the focus has been on whether licensees have the right to buy in a guest ale of their choosing. The hon. Member for Chesterfield mentioned the 160,000 members of CAMRA, and a lot of other people are also real ale lovers. I am proud to count myself among their ranks. I am proud of real ale—it is a uniquely British product that is not found anywhere else in the world, and I am proud to bits that it is growing. It is a craft product, and we should support it. I would love the Triple fff brewery in Four Marks, in my constituency, to have more outlets for its beer, which people would enjoy drinking. A guest ale option is positive for the increase of the brewery industry. However, we must be clear that it is a red herring for the survival of most pubs. Real ale is a small category in most pubs, and four out of 10 do not stock it at all. The drinks that matter in most pubs are standard lager, bag-in-box Coke and the others that generate the bulk of revenue.

The second set of objections to the tie are about pricing, which goes to the heart of pubs’ profitability. Sometimes when we discuss the matter—it happened in the last debate in the House—we speak as though, if we could remove the tie and the inflated beer prices from the equation, everything else would stay the same. Of course, that is not what would happen at all. The target margin for pubs is set by starting with a target return. There is an asset on the books with a certain value, and it is believed that the shareholders and the market require a certain return to be demonstrated on it. That return is split between rent and margin, the latter sometimes being known in the trade as “wet rent” for that reason. If the return was all on rents, the rent would clearly be higher and pubs would be more operationally geared, with a higher fixed cost. Arguably, more businesses might fail.

[Greg Mulholland]

With respect, although my hon. Friend speaks from a position of knowledge, I think he is missing the point. The whole point of the benchmark level of the market rent-only option—the Select Committee’s solution—is to stop the double overcharging that currently happens. The large pub companies have skewed the traditional tie so that there is no longer a lower rent if there are higher beer prices. The benchmarking survey by the Association of Licensed Multiple Retailers shows that tied rents are higher, on average, than free-of-tie rents, which is an abuse of the tied model.

[Damian Hinds]

It is difficult to go into the maths in great detail in a forum such as this, but with respect, I do not see how we can make that comparison, because we are talking about different pubs in different places.

--- Later in debate ---

[Mr Sheerman]

My hon. Friend is absolutely right and I was about to make that point. Let us look at the history. I have been in the House quite a long time and I remember what seemed to be a dramatic change when Lord Young of Graffham, then Secretary of State for Trade and Industry, cut up the industry, and the link between brewers that cared about their pubs and the pub estate was broken. That was done perhaps with the best intentions, but the unintended consequence was that people who had a tradition of brewing and who loved beer and their pub outlets were cut out of that relationship. The Conservative Government at that time—I am not being too rancorous about this—created unintended consequences that severely damaged brewing and the pubs of this country.

[Greg Mulholland]

The hon. Gentleman is right to say that that was an unintended consequence of the change, but organisations—particularly CAMRA at the time—said that there had to be a limit for all companies, including stand-alone pub companies, but that was not included because of industry lobbying. That led to the disaster that created the stand-alone pubcos and it is why the Government must now intervene to put that right.

[Mr Sheerman]

I agree, but we cannot get away from the fact that, as I see it, the whole brewing industry and the pub estates have been taken over by money men and women who are interested mainly in the return they can get on the estate and do not have a real love of the sector, brewing, beer and the leisure industry generally. I get the impression that the people who own most of the pubs in our country are not those who love the sector, and they are out to screw as much money and profit from it as they can. Some of them, because they made unwise takeover investments at a particular time, have become very ruthless indeed, although I shall not dwell on that.

The hon. Member for East Hampshire (Damian Hinds) made a very good speech, but one thing I feel strongly about as a long-term campaigner against smoking is the myth that banning smoking in pubs damaged trade. I do not think it did. I think it opened pubs to a broader audience of people who wanted to go out but not to finish the evening stinking of tobacco. That is the only thing I disagree with the hon. Gentleman about.

Hon. Members are sometimes cosy about the pub trade and defend it. I love the pubs in my constituency—I do not go to all of them, but there are some wonderful ones. We have some fine history, too, like the Luddite trail in Huddersfield. At the time of the Luddites, people could not belong to a political society or trade union. The only place they could meet—it was a secret society—was in pubs. People still go to many of the pubs that the Luddites conspired in, which is a lovely bit of history. The Exeter Arms in Helpston is the pub where John Clare played the fiddle—he was taught by Gypsies—and sang with his father, who was also a farm labourer. That is the wonderful history of Helpston. John Clare also worked as the pot man at the Blue Bell Inn to make ends meet.

There is history, but the industry, like any other, must be up to date. Many people stopped going to pubs because they did not keep up to date. The hon. Member for East Hampshire mentioned men going home from work and drinking a lot of beer every night. That has gone. The pub trade should keep up by providing good food and a good selection of drinks—I drink wine, but not much beer. Pubs should have well trained people serving. The skills training in the pub trade is very poor. I care very much about high-quality skills in every sector, but there is too little high-quality training of pub staff. I have found that there is very little training in pub management. Many who have a go at running a pub have never been trained to manage anything, which is a recipe for disaster. We need an industry with training at its core and with 21st century skills.

We also need a diverse community of pubs. One of the first social enterprises I started as a young councillor was a folk club for young people in a Welsh village. Pubs playing the relevant music for the area are an amazing draw. People go to pubs to have fun and a good time. If they cannot have fun and a good time in a pub, what is its purpose? A good time means different things for different parts of the community. The pubs mentioned by the hon. Member for East Hampshire reminded me of Roger Davies, a well known singer-songwriter from Brighouse in West Yorkshire, who strung together the names of all the pubs in his area in a glorious song.

Pubs have to upgrade. Back in the day, someone went into a pub in Rochdale after reading a sign saying, “Pie, pint and a friendly word.” He gets a pint, which is not very good, and his pie. He says to the landlord, “Where’s the friendly word?” The landlord leans in and says, “Don’t eat the pie.” I am sorry that my hon. Friend the Member for Rochdale (Simon Danczuk) was not in the Chamber to hear that, because that is too often the image of the pub. I love CAMRA and my local CAMRA organisation, but it sometimes puts people off. There is sometimes a stand-off in CAMRA pubs. There are only men, many wearing beards and dressed in a particular way. They sometimes make going to the pub a little bit too much of a minority leisure activity, which can be damaging.

The future of pubs is at the heart of the community, doing all sorts of things they have never done before. They could have crowdfunding centres, educational facilities for elderly and young people, and a range of activities, so that they are a hub in a broader sense than anyone has managed to achieve so far. I chair the Westminster forum on crowdfunding. Crowdfunding through CrowdPatch can turn a community around. Where better for such activity than the pub?

I commend the Opposition motion only because I want action. However, I want the trade and the pub industry to come up to date and do exciting and innovative things.

[Greg Mulholland (Leeds North West) (LD)]

I cannot say that it is a pleasure to take part in the debate. I echo the comments made by the hon. Member for West Bromwich West (Mr Bailey), the Chair of the Business, Innovation and Skills Committee. I pay tribute to him, to his predecessor, the hon. Member for Mid Worcestershire (Sir Peter Luff), and to his Committee for their excellent work. It is a stunning example of a Select Committee. Like the hon. Member for West Bromwich West, I would rather we were not having another debate on pub companies. If we have to have one, I would rather that we were voting on Government proposals that do what the Committee has said the Government should do since 2011.

We will have to have at least one more debate on pub companies—I have shared that with the hon. Member for Chesterfield (Toby Perkins). When we have the response, we will need to bring it before the House and show that the majority of hon. Members support not only action but the only sensible and obvious action, namely the Committee’s suggestion of a market rent only option.

It is important to remember the history of pub companies. Let us be clear that we are debating pubcos because of the concerted lobbying of a number of organisations. Last year, I was pleased to bring those organisations together under the banner of the Fair Deal for Your Local Campaign. Those 10 organisations—the Federation of Small Businesses, the Forum of Private Business, the GMB, the Guild of Master Victuallers, Fair Pint, the Pubs Advisory Service, Justice for Licensees, Licensees Supporting Licensees, CAMRA and Licensees Unite—have a membership of more than 2 million people. The campaign is now supported by no fewer than 206 MPs on both sides of the House. It is supported by the whole Opposition, so there is a clear majority for action.

I pay tribute to one MP who was a supporter of the Fair Deal for Your Local Campaign—the wonderful Member for Wythenshawe and Sale East, Paul Goggins, who is sadly no longer with us. I thank Paul for his support, which was yet another example of his commitment to social justice and a reform that we need if we are to have a fairer society.

The Department for Business, Innovation and Skills decided in 2011 not to do what we believed it would do. The reality is that we were outdone by some rather dodgy, behind-the-scenes lobbying. That is precisely why we set up the Fair Deal for Your Local Campaign—to ensure that, with the might of the 10 organisations behind us, we could tackle that lobbying head-on, which is precisely what we have done. It was the freedom of information request submitted by the all-party parliamentary save the pub group that outed the lobbying and led to the first debate and the unanimous vote for action.

To be fair to the Department for Business, Innovation and Skills and the Government, the motion in January 2012 said that we must have a consultation in autumn 2012. It appeared that we would not have one, but it happened. The consultation showed what we knew it would show: that the problems are as bad as ever and that self-regulation has failed. The response was the debate a year ago and the announcement of the consultation.

As someone who has campaigned on pub companies for something like six or seven years, I of course share hon. Members’ frustration. I am more frustrated than anyone and wish that the Government had responded by now, but they have not. The only reason that I shall support the amendment is that, as the Chair of the Business, Innovation and Skills Committee has said, there has been last chance after last chance for the industry, so the Government should have a last chance to act. This is that last chance. I assure the Chair of the Committee and the House that if the Government do not announce swiftly that they will back the Committee’s solution, and in a time frame that allows for legislation, they can be assured that I will lead the criticism most loudly, because it is so long overdue. That is where we are and I hope we will get a decision as soon as possible. What we are seeing from the rather desperate lobbying by industry sources are the death throes of an unjustifiable and unregulated business model, and the last sorry chapter in one of the worst and most shameful episodes of corporate abuse and financial mismanagement that the UK corporate sector has ever seen.

The Secretary of State was right to say that the issue is not the existence of a tied model, and just to correct my hon. Friend the Member for East Hampshire (Damian Hinds), it is not about the abolition of the tie. The Fair Deal for Your Local Campaign is very clear that it is about stopping abuse of the tie. That abuse is endemic because of reckless financial mismanagement, the acquisitions spree and the overvaluation scam that led to huge debts that are the reason why these companies are taking so much of the profit—often 75% and even 100% of pub profits—and stopping tenants and lessees making a living.

This is not about emotion or roses around the door, but cold, hard economics. While average tied rents are higher than free-of-tie rents—it should be the other way around, because the only justification for the tie is that if people agree to pay more for their beer they should pay a lower rent—beer prices go up and up and up, and the increases are above inflation every year.

I am delighted to see the Secretary of State back in his place. Does he know that Punch Taverns, which was the largest pub company, made an astonishing £2.271 billion in 10 years from selling on beer, simply by acting as a middle man, driving the price at the brewery down and selling on to tenants? I say to all my Conservative coalition partners—many are hugely supportive of this campaign, standing alongside the Federation of Small Business and the Forum of Private Business, and understand that this is about freeing up small businesses and giving them a chance—that this is about bringing in market forces. I say to those who are confused that this is not a market place that it working; it is an abuse of capitalism and a twisting of the market.

[Toby Perkins]

I thank the hon. Gentleman for giving way, though he has moved on slightly from the point I wanted to intervene on. On whether what we are now seeing are the death throes of a shameful part of the history of our corporate world, does he share my astonishment that the big pub companies are making the case that if their customers have the choice not to use them, they will not use them, and that that will cause them to collapse? Can he think of any other industry that would think it was credible to say, “The only reason our customers use us is because they have to, and if they don’t have to, we will collapse”?

[Greg Mulholland]

As the hon. Gentleman and, I think, many right hon. and hon. Members know, there has been an extraordinary campaign of misinformation on behalf of the big pub companies by their lobbyists the British Beer and Pub Association. I am sorry to say that it includes false statements that have been given even to the Select Committee: false statements about the reality of pub closure figures, and lots of unsubstantiated nonsense about how giving the right to a fair rent—that is all we are talking about; the right to choose whether to have a rent-only agreement—will somehow close breweries, create all sorts of disasters and close pubs. That must be stamped on. I urge all Members to read “Setting the Record Straight” by the Fair Deal for Your Local Campaign, which puts those myths to bed.

[Sir Andrew Stunell (Hazel Grove) (LD)]

I give my hon. Friend every encouragement to carry on the excellent work he has been doing over the years in Parliament. Does he agree that Punch Taverns, in particular, has very pernicious business practices? Just this weekend, I met the tenant of the Bulls Head in High Lane, who is a victim of its partner franchise tenancy. He has been driven out of business in less than nine months and tells me that he is one of three tenants of Punch Tavern inns who have been driven out of business in the past nine months through this pernicious sucking of capital and revenue out of the business.

[Greg Mulholland]

There are many, many examples from around the country that show just that. I have a word of caution for Business, Innovation and Skills Ministers, as it appears that some companies are using franchising to seek to circumvent the code, and that must be dealt with.

We have witnessed an extraordinary campaign of misinformation, but the report from the all-party save the pub group, to which the Secretary of State referred, showed the reality of pub closures. The CGA Strategy figures, often misquoted and misused in a disgraceful way, show clearly that between December 2004 and March 2013 the number of non-managed pubs—that is, tenanted and leased and mostly tied pubs—fell by 5,117, compared with a fall of only 2,131 free trade pubs in the same period. It is extraordinary for the BBPA to have gone around peddling the myth to the Select Committee—it fell for it previously, but it now realises that it was duped—when its own figures over 10 years showed that the number of non-managed, leased and tenanted pubs decreased by more than 8,000, while the free trade sector expanded by 1,600. No wonder it was keeping those figures rather quiet and relying on a distortion of others.

On pub disposals, Enterprise Inns and Punch Taverns, the two largest pub companies, disposed of more than 5,000 pubs—a third of their pubs—in just four years, between 2008 and 2012. I say to the Secretary of State that pub closures, both temporary and permanent, are being caused in huge number because of the inequity of the lease-tied pubco model. The argument, based on flawed conclusions, that some reports and analysts make is that there is no competition issue or consumer detriment. How can it be argued that there is no consumer detriment when in many cases consumers are having their pubs unnecessarily closed because of the abuse of the tie and the reckless mismanagement by such companies?

The solution is clear and it is backed by the Select Committee, the Fair Deal For Your Local campaign and 206 MPs. I say to my hon. Friends on the Conservative Benches that it is a simple market-based solution that would bring back not just fairness but competition into what has become an unequal and uncompetitive relationship. Do not take my word for it: take the word of the former community pubs Minister, the first appointed by the Prime Minister, my hon. Friend the Member for Bromley and Chislehurst (Robert Neill), who said:

“A market rent only option offers the only mechanism that can transform the fortunes of thousands of landlords across the country. It is a common sense market-based solution.”

The Prime Minister himself knows these problems all too well through the experience of The Chequers Inn in Witney, where the Enterprise Inns lessee had to move after a long dispute and lack of support. One of the most extraordinary things in that dispute was not the overcharging, which is endemic in the Enterprise Inns business model, or that at the same time as pubs were shutting, the boss Ted Tuppen and the new boss Simon Townsend paid themselves vast salaries and hundreds and thousands of pounds in bonuses, but that The Chequers Inn licensee, Simon Moore, could not deal directly with the brewery whose yard was at the back of his pub. I cannot believe that Conservatives can stand that business arrangement any more than the Liberal Democrats or Labour Members, and I welcome the support of so many MPs, including my hon. Friend the Member for Bromley and Chislehurst, and the chair of the all-party save the pub group, my hon. Friend the Member for Northampton South (Mr Binley), who has campaigned long and hard on this issue.

Let us look at the research and the reality, not the nonsense being peddled. The extraordinary piece of work by London Economics is frankly so flawed that it is a disgrace it was ever commissioned. I have put in a freedom of information request to find out the truth. That research concluded that if we stopped the large pub companies taking too much from pub profits, they would, according to the pub companies, be less viable. It concluded that that would lead to pub closures, when clearly the opposite is the case. At the end of the research we see the worrying phrase:

“London Economics would like to thank the pub companies who supplied us with confidential data”—

more behind-closed-doors thinking. We want to see those data and the brief given to it, because its conclusions are utterly absurd.

In reality, as seen in research by the Federation of Small Businesses, if we had a market rent only option, not only would 79% of lessees take it, but people would take on more staff and invest in their pubs, and confidence would increase—98% of tenants said they would have more confidence in the future of their business. Moreover, the projections show that nearly £80 billion would be pumped into the UK economy, rather than go abroad to pay off foreign creditors, the people currently—

[Madam Deputy Speaker (Dawn Primarolo)]

Order. I gently remind the hon. Gentleman that I asked Members to speak for 10 minutes so that we would not need a time limit and everybody could get in. He has now been speaking for 17 minutes, and other Members might not get in as a consequence. I would be grateful if he could reflect on that and perhaps draw his remarks to a conclusion.

[Greg Mulholland]

I apologise, Madam Deputy Speaker. I allowed my enthusiasm to get the better of me.

To conclude, these are the death throes of this model, but the Government must act to save hundreds of pubs. Punch Taverns is teetering on the brink. It is in discussion with bondholders that might anyway lead to its demise. Luckily its tenants and lessees have their rights, but they also need the right to a fair share of their pub profits. It is time we had a decision. I welcome the chance to give the Government the necessary nudge—that is what this is about—but let us come back and discuss this again when we get their response. They must now listen and their response must be the right one.

--- Later in debate ---

[Mr Robertson]

Not exactly, no, because how do we determine what the market rent level is? Is it the level for those with a tie or those without a tie? What about a repairing lease or a non-repairing lease? These are all details that need filling out, but I am not aware that they have been properly addressed. I want to deal with them and to make progress, but I am not sure we are there yet.

[Greg Mulholland]

The hon. Gentleman will be glad to know that I can help him. BIS Ministers have a copy of the definition of a market rent only option, which sets out how it would work and when it would be triggered. In essence, it is about simply paying a rent, which would be independently assessed according to statutory guidelines, and then being able to buy everything directly from the market. He seems to be making a mistaken comparison. The pubco tied leases are generally “fully repairing and insuring”. One of the scandals was when, as part of a tied lease, all the responsibility for that was shifted. A market rent only option is exactly what I have set out, and I will send that definition to him.

[Mr Robertson]

I am grateful to the hon. Gentleman; perhaps I could now move on to how rents are assessed. As has been said, quite often they are assessed not on the turnover of a pub, but on the potential turnover, which takes in things such as food and non-tied products. There is therefore an unfairness in the way that rents are assessed now. If we can move to a better system, I will certainly support that.

As has been said, there is also the inflated cost of tied products. For example, certain pubcos will charge £130.70 for a keg of Carling when it can quite easily be bought—we have looked at these figures—for £95. That is a huge difference, which squeezes the profits of the landlord and makes the beer more expensive for consumers. To give another example, Stowford is sold for £112.70 when it can be sourced for £79.99. Those are just two examples; I could go on and on if I had the time. I think hon. Members realise that this is a problem.

My hon. Friend the Member for East Hampshire (Damian Hinds) and my right hon. Friend the Secretary of State both mentioned this, but this debate is not just about the rent and the tie. We make a huge mistake if we believe that. We can look at those aspects at the beginning of a contract taken out with a pubco, but the relationship goes on from there, and sometimes it is the behaviour of the pubcos that causes the problems. For example, pubcos have the power to install fixtures and fittings and charge an exorbitant amount to the landlord, but he will not get anything back for them. Basically, the fixtures and fittings rule, which has been in existence for a long time, is a con, I am afraid. I thought carefully about whether I should use that word, but I think that rule is a con. It is an additional rent that people have to pay, which again squeezes the profits.

When people go into a pub owned by a pubco, they often have to go on expensive courses run by that pubco, for which it can charge exorbitant amounts. The cost of carrying out electricity checks, for example, has doubled in one year at the local pub I mentioned. It is the same pub, so why has the cost doubled? These are the sort of extraordinary charges that pubcos sometimes make in the course of running their ordinary business.

Extraordinary decisions are sometimes taken. The local pub I mentioned needed about £100,000 of work carried out, but the electrics and the roof were not completed when that work was done. There seemed to be an obsession with putting up new wallpaper, which was not necessary and not at all important. The work needed to be done over a six-week period, yet the period covering the jubilee week of last year was suggested. That is unbelievable—the busiest week of the busiest year in memory was chosen, and when the landlord refused to have the work done then and asked why it could not be done in January, there was a startled reaction.

I am providing examples to show that it is not just about the rent or the tie; it is about the behaviour of the pubcos as they go through the period of the agreement. I do not know how best to assess and tackle the problem, which is as important as other issues discussed today.

I have had my 10 minutes. I would have liked to talk about more issues, but in summary, I believe it is important to be careful to get this matter right. I think we need to take a little longer—I suggest not years, but months. Sometimes Government interventions can make things worse; sometimes Governments can be the problem rather than the solution. As I said at the outset, I believe that there is a problem and that it needs fixing.

--- Later in debate ---

[Ian Murray]

I am delighted that I gave the hon. Gentleman an opportunity to mention a lot of the pubs in his constituency—I hope that is reciprocated. As he rightly says, pubs provide a community benefit, and many of the premises I have frequented, and one I used to run, had the local Rotary club there raising a lot of money for charity, so the community part of the pub is very well established.

I wish to reflect on the relationship between tenants and the pubco owners of the premises, which has been mentioned. One thing I found galling when I ran one of my own premises was that our business development manager took great delight in telling us which tenants he was fining that week for buying out, which they had to do to make a small living. That kind of behaviour and culture in the pubcos highlights the problem we face. We must also address the issue of inaccurate information being provided when people are making big decisions, particularly, as my hon. Friend the Member for Chesterfield alluded to, when they are putting life savings into these premises; they have to make sure that the information they get is accurate.

[Greg Mulholland]

I thought it might be useful to intervene because I have something of an answer on the question of jobs. The research from the Federation of Small Businesses showed that the market rent only option would lead to 9,888 pubs in the UK taking on more staff, which would be worth £48 million in wages.

[Ian Murray]

I am grateful for the hon. Gentleman’s contribution. I only hope that he changes his mind and votes with us in the Lobby. It was striking that he said he would not be voting with us, given that he sent an e-mail to all Members yesterday encouraging them to do so. It is a shame that he will not change his mind, although he still has time.

Let me now deal with the remarks by the Secretary of State, whom I am delighted to see back in his place. He mentioned that he was drinking “mocktails” on his trade mission to the United Arab Emirates, and I wish him well in there. As you know, Madam Deputy Speaker, a “mocktail” is a cocktail without alcohol. The Secretary of State has invented a brand new word in today’s debate, because he has developed a “molicy”, which is a Government policy without legislation. He refused time and again to commit to bringing legislation forward in the Queen’s Speech. Why? It was because he probably does not want to bring it forward or he is being pressed not to do so. Despite making the case for urgency, he does not seem to be doing this. To continue the puns, he seems to be serving the pub trade very much a short measure in his response to this debate, .

My right hon. Friend the Member for Torfaen (Paul Murphy) rightly highlighted the numerous reports produced by the Business, Innovation and Skills Committee report, which are strewn over the Table. I can count 10 in front of us that have looked at this issue, so the Government do have a great degree of direction on which way they may wish to go. He was right to say that we have been round this issue time and again. He also talked about the considerable coalition for action that we have heard about, and we need to take cognisance of the number of people who have been looking at this matter.

The hon. Member for Norwich North (Chloe Smith) blamed the previous Labour Government for some of the problems. I was delighted when the Chair of the Select Committee, my hon. Friend the Member for West Bromwich West (Mr Bailey), highlighted that, because the conclusions of the 2009-10 report, which came out just before the general election, included the sentence:

“The industry must be aware that this is its last opportunity for self-regulated reform.”

It is clear that the reason the previous Labour Government did not take a statutory approach was that they were listening to the influential Select Committee.

My hon. Friend the Member for Plymouth, Moor View (Alison Seabeck) said that there was broad agreement on the matter in the House, but that Members and publicans become frustrated when the Government do not take the right action. My hon. Friend the Member for Clwyd South (Susan Elan Jones), despite her tour of both Norwich and Huddersfield, was sober enough to notice that there is little legislation on the Government’s current agenda and that there is time to promote this issue, and we hope that the Government will be able to do that before this Session finishes, or in the Queen’s Speech in May.

In their amendment to our motion on this subject last year, the Government said that they would create an adjudicator; they have done that already with the groceries code. This year’s amendment tends to row back from that. We cannot help but think that they are kicking the matter into the long grass, as they did with the zero-hours contracts until they were forced into action by the Opposition. The window of opportunity for a Bill before the general election is rapidly diminishing. The Government must introduce a Bill in the next Queen’s Speech; otherwise, there will be insufficient parliamentary time to pass it. Without such a Bill, we face starting the next Parliament with even more reports telling us how broken the pubco market is.

The Government must support our motion today and set in place a statutory code that allows a mandatory free-of-tie option, independent rate reviews and an independent adjudicator with teeth. That is what this House wants, what it has consistently voted for and what we are asking the Government to do. If the Government do anything else, they will yet again be seen to be failing to stand up to vested interests and to back the local pub.

Oral Answers to Questions

Greg Mulholland Excerpts

Tuesday 10th December 2013 Commons Chamber

[Mr Gauke]

In 2010, the noble Lord Eatwell said that

“we on this side agree…to confine the activities of the OBR to consideration of the impact of government policies alone. I am sure it is right that the OBR should not become embroiled in political controversy.”—[Official Report, House of Lords, 8 November 2010; Vol. 722, c. 16-17.]

I think he made a reasonable point.

[Greg Mulholland (Leeds North West) (LD)]

8. What estimate he has made of the cost to the economy of the leased pub company model.

[The Economic Secretary to the Treasury (Nicky Morgan)]

The Government recognise the important role that pubs play in communities. To support them, we ended the beer duty escalator and reduced the tax on a pint of beer at Budget 2013. The Department for Business, Innovation and Skills is currently considering responses to its consultation on pub companies and their tenants. This includes the independent economic analysis of the impact on pub numbers and employment levels from London Economics. BIS intends to publish this analysis in due course.

[Greg Mulholland]

The catastrophic effect of the financial engineering in the leased pubco model has been shown by the fact that one third of Punch and Enterprise pubs were disposed of in four years and that those two companies have more than £4 billion of debt. Considering the huge cost—hundreds of millions of pounds—both to the Treasury in lost tax and to the economy in money going abroad to foreign creditors, will the Treasury pledge today not to block attempts by BIS finally to introduce pubco reform, as was recommended by the Business, Innovation and Skills Committee?

Interest Rate Swap Derivatives

Greg Mulholland Excerpts

Thursday 24th October 2013 Commons Chamber

[Natascha Engel (North East Derbyshire) (Lab)]

It is a pleasure to follow the hon. Member for Aberconwy (Guto Bebb), and it was a pleasure to see him before the Backbench Business Committee again, although we had hoped that the position would be resolved on the first occasion when he appeared before us. It was also a pleasure—here I echo the sentiments of other Members—to be a member of his all-party parliamentary group on interest rate mis-selling. The group has demonstrated the power and effectiveness that all-party parliamentary groups can display when they are organised around a single issue, particularly when the issue is an injustice of this kind. The Committee was delighted to be able to schedule today’s debate, and I hope that we shall have as much effect today as we did all those months ago.

I want to focus on just a couple of issues raised by the hon. Member for Aberconwy—in particular, the idea of a moratorium, but also the terrible way in which this issue has been allowed to drag on and on. It is not just the banks that are involved; the Treasury is involved as well, and we should also consider the role of the Financial Conduct Authority. When, many months ago, members of the FCA appeared before the all-party parliamentary group, many of us were unimpressed by their lack of a sense of urgency. Everyone recognised that they wanted the redress scheme to be drawn up properly, but they certainly did not show the sense of urgency that they had shown when signing people up to the mis-sold schemes when it came to the question of redress.

[Greg Mulholland (Leeds North West) (LD)]

I do not know whether the hon. Lady has experienced the problem experienced by certain other Members. When the hon. Member for Harrogate and Knaresborough (Andrew Jones) and I wrote to the Financial Standards Authority about a shared case, the FSA replied that it did not deal with individual cases. We then wrote to the Minister, who told us to raise the matter with the FSA. We are going around in circles. Do we not need a different body—possibly even the National Crime Agency—to get a grip on the issue?

[Natascha Engel]

That is a very good point. We have had any number of cases where they have been passed from pillar to post. One of the terrible aspects of all this is that the individuals affected do not know where they can go to get justice, and they certainly do not have very much time to do that, because their businesses are going bust while they are waiting for justice.